S.African opposition calls for McKinsey to appear at parliament inquiry

Reuters Staff

3 Min Read

The logo of consulting firm McKinsey + Company is seen at an office building in Zurich, Switzerland September 22, 2016. REUTERS/Arnd Wiegmann

JOHANNESBURG (Reuters) - South Africa’s opposition Democratic Alliance (DA) called on Thursday for global consultancy McKinsey to answer questions at a parliamentary inquiry following a Reuters story about the firm’s alleged involvement in a corruption scandal.

McKinsey has been under scrutiny in recent months in a scandal over the alleged influence businessmen friends of President Jacob Zuma, the Guptas, have over the allocation of state contracts worth hundreds of millions of dollars.

Parliament’s Committee on Public Enterprises is investigating whether McKinsey knowingly let funds from state power utility Eskom be diverted to a Gupta company as a way of securing a $78 million contract to advise Eskom.

McKinsey has denied any wrongdoing and says it will cooperate with the authorities if evidence of any impropriety emerges.

Reuters reported on Wednesday that McKinsey ignored suspicions raised over several years by senior staff that companies it worked with -- one of which was controlled by the Gupta family -- were set up to steer state contracts. [nL8N1LG32J]

Shadow minister of public enterprises Natasha Mazzone said the demand for McKinsey to appear before the committee was as a result of the story.

“This follows the explosive revelations that McKinsey allegedly ignored warnings from senior South African staff regarding the risks accompanying the Gupta-linked company, Trillian Capital, in order to secure a multi-billion rand deal with Eskom,” Mazzone said in a statement.

“The truth is that an Eskom-Trillian contract was far too profitable for McKinsey to lose, which is potentially the reason why they chose to ignore these red flags,” she added.

“We will cooperate fully with any official inquiries and investigations,” McKinsey spokesman Steve John said in response to Mazzone’s statement.

McKinsey is one of several global firms to be dragged into the Gupta scandal.

The British arm of Bell Pottinger collapsed this week after the global public relations agency’s clients deserted it over a racially-charged political campaign it ran for the Guptas. [nL5N1LT59M]

“The DA and the South African public took on Bell Pottinger, and we will not hesitate to take on McKinsey,” Mazzone said.